York Trust, Real Estate & Deposit Co. v. Gallatin

Citations

• 186 Pa. 150
• 40 A. 317
• 1898 Pa. LEXIS 971

Syllabus

<p>Building and loan association — Loans—Appropriation of payments.</p> <p>A borrower from a building and loan, association who lias deposited his stock as collateral for the loan may, before the intervention of the rights of creditors, direct appropriation of his payments on the stock to the extinguishment of the debt, and where the appropriation is made at the inception of the contract of loan, it cannot thereafter be successfully questioned.</p> <p>The by-laws of a building and loan association provided that the security for a loan “ shall be real estate, or by the borrowing member assigning his share or shares of stock to the association in pledge.” The bond for the loamcontained a covenant by the borrower that all money paid by him into the association on the stock held by him ‘1 shall be taken and considered as payment on and in liquidation of this bond.” Held, that the covenant in the bond operated as an express appropriation of, and not as a direction to appropriate, payments on stock to the extinguishment of the loan.</p>